Public or
private?
Skagit County PUD reviving the great electric
debate
Ralph Schwartz contributed to this report.
Franny White can be reached at 360-416-2148 or fwhite@skagitvalleyherald.com.
By
FRANNY WHITE / Staff Writer
It has been
several decades since public and private utilities fought over control of the
electric power market in Washington state. An idea now being floated by the
Skagit County Public Utility District could revive that historic debate.
At issue is whether the PUD, which now provides
only water service, should offer electricity to the county. Electrical service
is currently provided in the county by the privately owned Puget Sound Energy.
PUD officials have been meeting with several local government leaders about the
idea since January, said PUD General Manager David Johnson.
No formal proposal has been made yet, and the
PUD is considering a number of possibilities. One of the simpler options could
be to acquire electric distribution lines within the county that are currently
owned by Bellevue-based Puget Sound Energy.
The
plan could also expand to include the two hydroelectric dams on the Baker River
in northern Skagit County. But PUD Commissioner Robbie Robertson said it’s “way,
way premature” to be talking about owning the dams.
Robertson also said the PUD could produce
its own electricity using Skagit’s other renewable resources such as wind, sun
and ocean tides. And the PUD could install electric-producing turbines in the
pipes it already uses to distribute water.
Robertson explained his considerations: “Do we
want private industry coming in and setting up wind farms, tidal generation and
those kinds of things and taking Skagit’s resources and selling them outside?
Or, alternatively, would it be better for the PUD to manage and operate those
kinds of systems?”
PSE concerns
What triggered the discussion was PSE’s
October announcement that its board accepted a buyout offer by an international
investment group. That sale, valued at $7.4 billion, awaits regulatory approval.
PUD officials say private residents and local businesses approached PSE after
the announcement and asked it to consider providing electricity.
Members of the Skagit Citizens Alliance for
Rural Preservation are among those who support the idea. They argue that
Macquarie Consortium, an association of investment groups and pension funds in
New York, Canada and Australia, might not take care of Skagit’s power
infrastructure as well as a local entity would.
Of particular concern for alliance President
Diane Freethy are the two Baker River dams. If not properly maintained, they
could deteriorate and potentially flood rural Skagit County, she said.
“Anything can happen when control of the
corporation is outside your border,” Freethy said.
PSE communications Director Martha Monfried
noted that PSE is already a publicly traded company with international
investors. And she said the company remains committed to serving Skagit County.
Private utilities such as PSE are regulated by
both the Washington Utility and Trans-
Upper Baker River Dam:
105-megawatt
capacity; completed in 1959; $80 million in improvements scheduled to be made
Lower Baker
River Dam:
70-megawatt capacity; built in 1925
Fredonia natural
gas-fired power plant:
214-megawatt capacity; originally built in
1984, additions made in 2001
Source: Puget Sound Energy
portation
Commission and the Federal Energy Regulatory Commission.
Public versus private
Skagit County isn’t the first to have the
public-private debate.
In the early 20th
century, rural Washingtonians argued for more control when private electric
companies offered them poor service at high cost, said Dean Boyer, spokesman for
the Washington Public Utility Districts Association. It was more profitable for
companies to focus on larger population centers.
But rural areas fought back in 1930 when state
voters approved an initiative that allowed the formation of public electric
utility districts. Public power providers such as the PUD can offer better
service at a better price, Boyers said.
“That’s
certainly a huge part of being a public utility district,” Boyer said. “They are
publicly owned, they are nonprofit and they are locally regulated by an elected
board of commissioners that is directly responsible to the voters of the county.
That’s something that isn’t true with investor-owned utilities. Other than a
business relationship, Puget Sound Energy has no accountability to the people of
Skagit County.”
Ursula Schryver of the American
Public Power Association agrees that the benefit of public utilities is local
control.
“It all comes to local control,”
Schryver said. “You never know when (a private electric company is) going to be
sold, and you don’t know what (the new owners’) priorities are going to be.”
‘Huge undertaking’
PUD’s Johnson recognizes that becoming a
power provider would be a large shift for the local utility.
“Frankly, the current organization would not be
able to support being in the electricity business,” Johnson said. “We would have
to bring additional resources on board. It’d be a huge undertaking, but it’s not
inconceivable.”
But county commissioners have
expressed concern about the PUD’s ability to follow through on its electric
proposal. During a briefing Monday with County Administrator Gary Rowe,
Commissioners Don Munks and Ken Dahlstedt said they were troubled by how local
residents could be affected by an international company buying Puget Sound
Energy.
However, they also said the PUD hasn’t
finished some of its previous proposals, including offering sewer service to
Similk Bay on Fidalgo Island and providing wholesale fiber optic Internet
service.
The PUD has too many projects right now
and can’t seem to keep up, Dahlstedt said. Instead, Dahlstedt suggested that the
county could partner with Seattle City Light, a public power provider from King
County that also has dams in Skagit County.
Johnson countered that the fiber-optic proposal
is moving ahead. PUD commissioners have hired a consultant to design the fiber
optic line, which could be installed between Mount Vernon and Concrete by May.
And though county voters gave the PUD authority to provide sewer service in
November 2000, Johnson said the utility district later learned developing a
sewer system near Similk Bay homes was too expensive.
The PUD has a responsibility to its customers to
consider offering electricity, Johnson said.
“The only reason we would even consider
discussing this issue is because we’re probably the only other entity in the
county that is capable through (state laws) to provide electric service to the
county,” he said.
Too soon to say
The PUD’s Board of Commissioners has not
formally discussed the matter, nor has it made any decisions, Robertson said.
But Johnson said the PUD could decide to hire a consultant for a feasibility
study “in the next couple of weeks.”
If those
explorations prove positive, the PUD could put the matter before Skagit County’s
voters as early as this fall’s general election. The PUD commissioners have
until Aug. 12 to file a resolution with the Skagit County Auditor’s Office that
would put the proposal on the Nov. 4 ballot.
“It’s really premature to say Skagit County PUD
is going to get into the electric business,” Robertson said. “It’s our duty to
go out and explore what those opportunities may or may not be.”
PSE, which has not been a part of the
discussions, has a meeting scheduled for Monday with PUD officials.
Photos by
Scott Terrell / Skagit Valley Herald Puget Sound Energy poles carry
electricity along Peterson Road looking east near the intersection of Avon-Allen
Road. Lines such as these could be acquired by the Skagit Public Utilities
District, which is considering becoming the county’s power provider.
“The only reason we would even consider
discussing this issue is because we’re probably the only other entity in the
county that is capable through (state laws) to provide electric service to the
county.” PUD General Manager David Johnson
“Do we want private industry coming in and
setting up wind farms, tidal generation and those kinds of things and taking
Skagit’s resources and selling them outside? Or, alternatively, would it be
better for the PUD to manage and operate those kinds of systems?” PUD
Commissioner Robbie Robertson
A Puget Sound Energy power plant at
Fredonia uses natural gas to generate electricity.
Skagit
Valley Herald / 2006 Water pours over Lower Baker Dam into the Baker
River.
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